Programmatic as a Growth Driver – Fact or Fiction?

by Robert Macmillan, Chief Executive

Not so long ago, as I regularly do, I was catching up on my industry news when a headline grabbed my attention “Vistar Media Surges in H1 2024 as OOH market continues its ascent” . Digging a little deeper, I read the following:

• “Vistar’s record H1 is a strong testament to the growth of OOH and DOOH in 2024. According to OAAA, OOH advertising revenue increased 6.8% to $1.94 billion in the first quarter of 2024, marking the highest first-quarter volume in OOH history”
• “31% YoY increase in new advertisers running digital out-of-home (DOOH) campaigns with Vistar”
• “A significant surge in overall campaign billings by 77% YoY”

Now this may not seem odd, but to me, at least, it did. You see, OutFront and Clear Channel had also just reported Q2 earnings and specifically called out softness in national, the stomping ground of Vistar. So I did what I always do when I am confused, I turned to the numbers.

Stay with me….the questions at the end is worth it

OutFront Media in Q1 and Q2 of 2024 reported national revenue of $342m and in those quarters in 2023 they reported national revenue of $345m. In 2023, their total national ad spend for the year was $731.4m and if you annualize Q1 and Q2 of 2024 they are on track for $684m. Both on a half year and annualized basis Outfront Media’s national ad dollars are down. 2024 annualized over 2023 by around $47.4m.

Clear Channel in Q1 and Q2 of 2024 reported national revenue of $187m and in those quarters in 2023, they reported revenue of $179m. In 2023, their total national ad spend for the year was $381m and if you annualize Q1 and Q2 of 2024 they are on track for $375m. On a half year basis, they are up $8m and on an annualized basis they are down $6m.

If the two bellwethers for US OOH national ad spend are both looking to be down 2024 annualized over 2023 by a combined $53m but the total OOH market was up 6.8% in Q1 and Vistar is up 77% YTD, what is going on?

First – local or the long tail is a significantly stronger and larger ad segment which is growing at much faster rates than national. The long tail is driving growth, always has, always will.

Second – The rise of programmatic is simply not translating to growth of the OOH pie.

Questions:

1. Is programmatic really attracting new advertisers who are spending meaningful new money or is it just the same advertisers executing via an automated platform?
2. If programmatic is driving meaningful new revenue, where is it going? As its not showing up the numbers?
3. Programmatic is not driving meaningful total revenue growth, given this, is their fee extraction worth it for both publishers and advertisers or is this a market inefficiency, a tariff or tax if you will, that dilutes the effectives of each dollar spent via this channel?

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